Norm Zada, president of Perfect 10, the online presence for the now defunct print porn magazine of the same name, is back, and is now going after Microsoft. He files suit in U.S. District Court, Central District of California, this week alleging that Microsoft’s MSN image search feature creates unauthorized thumbnails of content owned by Perfect 10 and includes links to see full-size versions of the images for free. Additionally he claims that the normal MSN websearch engine allows people to find passwords that have been posted on other Web sites which enable people to illegally access the Perfect 10’s Web site, that that Microsoft also takes advertising money from Web sites that have stolen Perfect 10 images.

If this all sounds a bit familiar, it’s because it is. Zada has previously gone after Google, launching a lawsuit against them in 2004 claiming the same things. Perfect 10 are currently appealing a Ninth Circuit Court of Appeals decision which remanded the case back to the District court after reversing the District court’s decision that Perfect 10 was likely to succeed in showing that Google’s creation of thumbnails of Perfect 10 photographs was a direct infringement of Perfect 10’s display rights. The 9th Circuit ruled that Google’s use of thumbnails was fair-use and that, as in Kelly v Arriba, the transformative nature of the thumbnails – it enhances the search functionality – is “more significant than any incidental superseding use”

The incidental superseding use referred to Perfect 10’s claims that Google’s use of thumbnails harmed the potential market for downloading Perfect 10’s reduced size content via mobile phones. Perfect 10 had a third party licensing deal in place with Fonestarz to deliver smaller (thumbnail size) versions of their content to UK mobile phone subscribers. The District court found there was little if any difference between the content a user could download from Fonestarz at a cost and the thumbnail images of this content stored on Google’s servers that could be downloaded for free. The 9th Circuit, however, pointed out that no evidence had been provided to demonstrate that anyone had actually download any thumbnail of perfect 10 content, so the issue was hypothetical.

It wasn’t all bad news for Perfect 10 though, and this maybe why they feel it is worth going after Microsoft now too, as the 9th Circuit also reversed the District courts opinion that Perfect 10 was unlikely to succeed in showing Google was guilty of secondary liability, finding the court had failed to consider whether Google (and Amazon) knew of infringing activities yet failed to take reasonable and feasible steps to block access to infringing images.

According to Zada Microsoft’s MSN / Live search engine, as well as those of Google and Amazon, have caused his company to lose $4 million a month, and were the direct cause of Perfect 10 closing its magazine after 10 years in print due to images being available for free online. He added that Microsoft has rejected efforts to reach a settlement. “I’m shocked by Microsoft’s attitude in this matter,” said Zada. “You would think that as a major copyright holder itself, Microsoft would be extremely sympathetic to concerns of other copyright holders, and would go out of its way to not copy copyrighted works without permission, or link to or promote massive thieves of other people’s property. Ironically, Microsoft has chastised Google for copying other people’s work without permission, but now Microsoft is doing just that.”

It is pleasing to see that despite all his financial loses he still has the mony to launch another (almost certainly fruitless) lawsuit.